Legal Tip 162: Dying Intestate and Leaving a Spouse with Children not of that Spouse

Discussion in 'Wills & Estate Planning' started by Terry_w, 10th Jul, 2017.

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  1. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

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    Dying Intestate: Leaving a Spouse with Children not of that Spouse

    Brady Bunch situation.

    What actually happens if a person dies without a will, and they have children and a spouse who is not a parent of those children?

    Under NSW law section 113 of the Succession Act will apply:
    SUCCESSION ACT 2006 - SECT 113 Spouse’s entitlement where any issue are not issue of the spouse

    The spouse will be entitled to the majority of the assets:
    i) All of the personal effects of the deceased, plus
    ii) A Statutory legacy amount of about $350k (changes with CPI), plus
    iii) Half of the remainder.

    The children will get equal shares of what is left. Children here does not include step children.

    Example
    Mike is married to Carrol
    Mike has 3 boys with a woman other than Carol
    Carol has 3 girls with a man other than Mike.
    Mike dies without a will
    Mike owns $400,000 worth a shares, a main residence owned with Carol as Joint Tenants, an investment property with $1mil with Carol as Tenants in Common in equal shares.
    What happens?

    Carol gets all of Mike’s stuff – his golf clubs, playboy collection, watches etc
    The main residence goes to Carol automatically bypassing the will and intestacy laws because it is owned as Joint Tenants.
    Mike’s other assets are
    Carol gets $350,000 Cash or assets.
    Mike’s remaining assets are $500,000 worth of the investment property.
    After the $350k is taken out there is only $150,000 left for his children. Mike’s 3 boys get $50k each.
    The 3 girls do not get anything as they are not Mike’s children (unless he legally adopted them).
    Carol now goes off and marries Frank.
    (happy ending – for Carol)

    If Mike had a will he could have changed the outcome.
     
    Simon Moore and Ouchmyknees like this.